Futures tracking the S&P/TSX Composite Index declined on Wednesday, pressured by escalating tensions in the Middle East. The United States struck targets in Iran in response to an attack on a helicopter near the Strait of Hormuz, while Iran retaliated with strikes on US bases in Kuwait and Bahrain. This renewed exchange of attacks has dimmed hopes for an agreement to end the conflict and reopen the key shipping route.
Oil prices climbed on the developments, heightening inflation concerns and raising the risk of a more hawkish stance from the Bank of Canada, which weighed on bank shares and the broader index. In contrast, gold prices retreated on expectations of tighter US monetary policy, pressuring mining stocks. Technology shares also came under renewed selling pressure as enthusiasm for artificial intelligence continued to fade.
Investors are now focused on the Bank of Canada’s upcoming policy decision, with markets widely expecting the central bank to leave interest rates unchanged.